FDI and growth
The effects of multinational production on domestic performance: evidence from Japanese firms
How becoming a multinational firm affects home performance
Authors:
A. Hijzen; T. Inui; Y. Todo
Publisher:
Research Institute of Economy, Trade and Industry , 2006
This paper evaluates how, when firms establish foreign affiliates, this effects productivity, output and employment in their home country. The study draws on a large panel of Japanese firms over the period 1995-2002.
The authors argue that Japanese outward foreign direct investment (FDI) tends to strengthen the economic activities of Japanese firms in Japan in terms of both output and employment. The authors however, do not find a significant positive effect on productivity. At the same time, they do not observe any negative effect as some have argued. It is therefore conclude there is no direct negative effect on the firm’s productivity.
